6 ms·

Trading in Stocks, ETFs Was Halted More Than 1,200 Times Early Monday

58 points by brbcoding 11y ago

a3n 11y ago
https://duckduckgo.com/?t=lm&q=Trading+in+Stocks%2C+ETFs+Was+Halted+More+Than+1%2C200+Times+Early+Monday https://duckduckgo.com/?t=lm&q=Trading+in+Stocks%2C+ETFs+Was... http://money.cnn.com/2015/08/24/investing/stocks-markets-selloff-circuit-breakers-1200-times/index.html http://money.cnn.com/2015/08/24/investing/stocks-markets-sel...
hartator 11y ago
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCAQqQIwAGoVChMIlvbAgPTDxwIVxjQ-Ch15AwDk&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Ftrading-in-stocks-etfs-paused-more-than-1-200-times-early-monday-1440438173&ei=czPcVdbwCsbp-AH5hoCgDg&usg=AFQjCNG-2rSF-n3uw7Xub6HFLXJjpDN08g https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...
- a3n 11y ago
  For quite some time, the google workaround just brings me to the same truncated WSJ article, with an invite to subscribe or log in. The above link fails to get me in as well. Is this working for some, but not for others? I've assumed that WSJ has just turned this method of entry off.
  - deleted 11y ago
    [deleted]
  - jackgavigan 11y ago
    Clicking on a link posted by someone else doesn't work for me but going to Google, searching for the headline and then clicking on the link does work.
  - brobinson 11y ago
    It works for me in FF 40.0 with uBlock Origin and Ghostery, 3rd party cookies blocked, all first party cookies accepted.
  - msravi 11y ago
    I had this same problem. Turns out that the referrer header must come from google for it to work. So: 1. Enable sendRefererHeader in about:config (if you've disabled it in Firefox) 2. Turn off referrer spoofing if you're using uMatrix (or add this rule: referrer-spoof: wsj.com false)
  - asib 11y ago
    There's a neat Chrome plugin that was posted on HN a while ago called Wait, Google Sent Me (https://news.ycombinator.com/item?id=9531941 https://news.ycombinator.com/item?id=9531941). If you go to the article and then click the plugin's icon in Chrome, it shows you the whole article.
    - joshstrange 11y ago
      I use this but it is no longer in the chrome store. I found this bookmarklet that is supposed to do the same thing: javascript:location.href%3D%27https://www.google.com/webhp%3F%23q%3D%27%20%2B%20encodeURIComponent(location.href)%20%2B%20%27%26btnI%3DI%27 YMMV
randomname2 11y ago
Yesterday was similar to the flash crash of 2010, except this time liquidity was much worse throughout the entire day, with a paralyzed market which was the direct result of countless distributed, isolated mini flash events, all of which precipitated the market's failure for the first 30 minutes of trading, illustrated by these stunning charts from Nanex: https://twitter.com/nanexllc https://twitter.com/nanexllc Of note in the WSJ article is the passage noting the extreme discrepancy in EFT prices and fair value as hedge funds sold off ETFs and market makers such as high speed traders and Wall Street firms refused to step in.
- lrm242 11y ago
  We did 13 billion shares yesterday, which is nearly 2x the 10 day average. The market was far from broken. In fact, I'd say it performed remarkably well.
  - gchokov 11y ago
    Finally some common sense. +1
phelm 11y ago
The need for these 'circuit breakers' really highlights the fact that Laissez-faire economic systems are in no way capable of keeping themselves stable.
- miscellaneous 11y ago
  >Laissez-faire economic systems are in no way capable of keeping themselves stable. This is the point - Laissez-faire economic systems function well on their own, it just happens that humans prefer systems that are "stable". Hence, regulators try to limit the volatility of markets meet their stability preferences. Whether this is ultimately beneficial is an ongoing debate. I would point out that in many cases enforcing artificial stability on markets can have negative outcomes. Recently, the +/-10% limits on daily stock price movements in China created situations where many stocks increased by 10% every day for over 100 days [0]. Such illusions of stability likely played a role in the recent bubble/crash in China. It could be said that attempts to regulate 'stability' into markets merely leads to a masking of tail risk, which can be very dangerous. [0] https://news.ycombinator.com/item?id=9471858 https://news.ycombinator.com/item?id=9471858
  - ild 11y ago
    Markets cease to exist in unstable environment; "artificial" or not, stability is a precondition for existence of any social institution;I mean, come on, who wants to participate in unstable market?
    - fleitz 11y ago
      Anyone who knows how to do a butterfly spread. The market is not unstable it is volatile.
      - ild 11y ago
        Yeah, extreme volatility is the definition of instability.
      - pbhjpbhj 11y ago
bluedevil2k 11y ago
Look at the ETF RSP yesterday. It's pretty much an S&P 500 index fund. When the S&P was down about 5% in the morning, RSP was down up to 40%. Didn't make any sense. Trading was getting halted every few minutes and buy orders were going unfilled. http://finance.yahoo.com/echarts?s=RSP+Interactive#{%22range%22:%221d%22,%22allowChartStacking%22:true} http://finance.yahoo.com/echarts?s=RSP+Interactive#{%22range...
- lrm242 11y ago
  It makes a ton of sense, actually. Intense fear drove large demands for liquidity thus spiking volatility. Thinly traded stocks and ETFs were hit harder than thick ones. ETFs, in particular, had additional demands placed on them as their underlyings were thrashed about at the open as many rushed to sell. The halts were from both limit up/down price band violations and volatility pauses and they did exactly what they were designed to do. In short: liquidity costs money and it isn't an infinite resource.
- jackgavigan 11y ago
  An ETF like RSP won't always track the underlying index value exactly, especially in fast-moving markets. Units of an ETF are just like any other share - an imbalance of sellers over buyers will drive the price down. In an orderly market, that usually isn't a problem - market makers will typically be there ready to absorb market orders and smooth out temporary imbalances, and "authorised participants" can create/redeem units/shares in the ETF if the market price starts to deviate from the NAV (net asset value - the market value of the underlying assets in the fund). In a situation like we had yesterday morning, it's likely that market makers and authorised participants were staying out the market because it was moving too fast for them. In that sort of situation, if panic-sellers or forced sellers (e.g. due to margin calls) are placing market orders, an order book imbalance could easily develop, temporarily driving the price down to an unreasonable level before the market stabilises. Sudden drops trigger trading halts, where trading is suspended for ~5 minutes. Trading in RSP was halted ten times between 9:30 and 10:30am yesterday - it didn't actually trade continuously for more than 34 seconds during that time (you can see this on the chart you linked to - there are only 11 points in the big V on the chart, then it reverts back to one point every minute from 10:30 onwards. The same sort of thing happened during the Flash Crash in 2010.
deleted 11y ago
[deleted]
lucaspottersky 11y ago
loved the paywall
grecy 11y ago
I find it amusing that when the market is rapidly going up, everything is left alone. But when it's rapidly going down, or sporadically doing so, they halt trading and turn everything off for a while. Does anyone else not see this as a clear sign the entire setup is broken and bogus? It's all a big joke.
- thesimpsons1022 11y ago
  what are you talking about? did you even read the article? it clearly says that anytime a stock goes UP OR DOWN 5 pct they halt trading on it for 5 minutes.
jvm 11y ago
Throughout this thread, commenters are assuming that circuit breakers are helpful and useful. Yet no evidence in favor of that assumption is presented in the WSJ article. The CNN article quotes someone named "Dennis Dick" claiming they are useful without providing evidence. Under economic theory, interference in markets prevents them from correcting prices and is therefore never a good thing. Certainly Milton Friedman [1] thought they were harmful rather than helpful. Is anybody interested in sharing positive evidence that they are helpful? Helpful is presumably defined to mean they help prices stay as accurate as possible. [1] https://books.google.com/books?id=5NQvv_Z-zKcC&pg=PA151&lpg=PA151&dq=milton+friedman+on+circuit+breakers&source=bl&ots=4aqiH3-Hq4&sig=jpXqaDLdflv76iDbD73rZ4eBSUQ&hl=en&sa=X&ved=0CB8Q6AEwAGoVChMI8NrdzNDExwIVRZ6ACh1F9QGX#v=onepage&q=milton%20friedman%20on%20circuit%20breakers&f=false https://books.google.com/books?id=5NQvv_Z-zKcC&pg=PA151&lpg=...
- confluence 11y ago
  > Certainly Milton Friedman [1] thought they were harmful rather than helpful. Ah yes, Milton Friedman, the man who was right about everything. Also never? Good god man, so what about market manipulation? > Under economic theory, interference in markets prevents them from correcting prices and is therefore never a good thing. Well if the market knew what it was fucking doing then it wouldn't need to correct prices now then would it? But the market does not know what it is doing, and when it shits itself, we have to come in and stop the world from imploding in a negative feedback loop.
- stouset 11y ago
  Your definition is inherently skewed. After all, what is an "accurate" price other than what the market is trading? Furthermore, why is an accurate price the overall goal? Perhaps other goals are more worthy, and would come at the expense of accuracy.
kaneplusplus 11y ago
http://www.barrons.com/articles/SB50001424052702304718904576486604254916420 http://www.barrons.com/articles/SB50001424052702304718904576...

58 points by brbcoding 11y ago

a3n 11y ago

https://duckduckgo.com/?t=lm&q=Trading+in+Stocks%2C+ETFs+Was+Halted+More+Than+1%2C200+Times+Early+Monday https://duckduckgo.com/?t=lm&q=Trading+in+Stocks%2C+ETFs+Was... http://money.cnn.com/2015/08/24/investing/stocks-markets-selloff-circuit-breakers-1200-times/index.html http://money.cnn.com/2015/08/24/investing/stocks-markets-sel...

hartator 11y ago

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCAQqQIwAGoVChMIlvbAgPTDxwIVxjQ-Ch15AwDk&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Ftrading-in-stocks-etfs-paused-more-than-1-200-times-early-monday-1440438173&ei=czPcVdbwCsbp-AH5hoCgDg&usg=AFQjCNG-2rSF-n3uw7Xub6HFLXJjpDN08g https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

a3n 11y ago
For quite some time, the google workaround just brings me to the same truncated WSJ article, with an invite to subscribe or log in. The above link fails to get me in as well. Is this working for some, but not for others? I've assumed that WSJ has just turned this method of entry off.
- deleted 11y ago
  [deleted]
- jackgavigan 11y ago
  Clicking on a link posted by someone else doesn't work for me but going to Google, searching for the headline and then clicking on the link does work.
- brobinson 11y ago
  It works for me in FF 40.0 with uBlock Origin and Ghostery, 3rd party cookies blocked, all first party cookies accepted.
- msravi 11y ago
  I had this same problem. Turns out that the referrer header must come from google for it to work. So: 1. Enable sendRefererHeader in about:config (if you've disabled it in Firefox) 2. Turn off referrer spoofing if you're using uMatrix (or add this rule: referrer-spoof: wsj.com false)
- asib 11y ago
  There's a neat Chrome plugin that was posted on HN a while ago called Wait, Google Sent Me (https://news.ycombinator.com/item?id=9531941 https://news.ycombinator.com/item?id=9531941). If you go to the article and then click the plugin's icon in Chrome, it shows you the whole article.
  - joshstrange 11y ago
    I use this but it is no longer in the chrome store. I found this bookmarklet that is supposed to do the same thing: javascript:location.href%3D%27https://www.google.com/webhp%3F%23q%3D%27%20%2B%20encodeURIComponent(location.href)%20%2B%20%27%26btnI%3DI%27 YMMV

randomname2 11y ago

Yesterday was similar to the flash crash of 2010, except this time liquidity was much worse throughout the entire day, with a paralyzed market which was the direct result of countless distributed, isolated mini flash events, all of which precipitated the market's failure for the first 30 minutes of trading, illustrated by these stunning charts from Nanex: https://twitter.com/nanexllc https://twitter.com/nanexllc Of note in the WSJ article is the passage noting the extreme discrepancy in EFT prices and fair value as hedge funds sold off ETFs and market makers such as high speed traders and Wall Street firms refused to step in.

lrm242 11y ago
We did 13 billion shares yesterday, which is nearly 2x the 10 day average. The market was far from broken. In fact, I'd say it performed remarkably well.
- gchokov 11y ago
  Finally some common sense. +1

phelm 11y ago

The need for these 'circuit breakers' really highlights the fact that Laissez-faire economic systems are in no way capable of keeping themselves stable.

miscellaneous 11y ago
>Laissez-faire economic systems are in no way capable of keeping themselves stable. This is the point - Laissez-faire economic systems function well on their own, it just happens that humans prefer systems that are "stable". Hence, regulators try to limit the volatility of markets meet their stability preferences. Whether this is ultimately beneficial is an ongoing debate. I would point out that in many cases enforcing artificial stability on markets can have negative outcomes. Recently, the +/-10% limits on daily stock price movements in China created situations where many stocks increased by 10% every day for over 100 days [0]. Such illusions of stability likely played a role in the recent bubble/crash in China. It could be said that attempts to regulate 'stability' into markets merely leads to a masking of tail risk, which can be very dangerous. [0] https://news.ycombinator.com/item?id=9471858 https://news.ycombinator.com/item?id=9471858
- ild 11y ago
  Markets cease to exist in unstable environment; "artificial" or not, stability is a precondition for existence of any social institution;I mean, come on, who wants to participate in unstable market?
  - fleitz 11y ago
    Anyone who knows how to do a butterfly spread. The market is not unstable it is volatile.
    - ild 11y ago
      Yeah, extreme volatility is the definition of instability.
    - pbhjpbhj 11y ago

bluedevil2k 11y ago

Look at the ETF RSP yesterday. It's pretty much an S&P 500 index fund. When the S&P was down about 5% in the morning, RSP was down up to 40%. Didn't make any sense. Trading was getting halted every few minutes and buy orders were going unfilled. http://finance.yahoo.com/echarts?s=RSP+Interactive#{%22range%22:%221d%22,%22allowChartStacking%22:true} http://finance.yahoo.com/echarts?s=RSP+Interactive#{%22range...

lrm242 11y ago
It makes a ton of sense, actually. Intense fear drove large demands for liquidity thus spiking volatility. Thinly traded stocks and ETFs were hit harder than thick ones. ETFs, in particular, had additional demands placed on them as their underlyings were thrashed about at the open as many rushed to sell. The halts were from both limit up/down price band violations and volatility pauses and they did exactly what they were designed to do. In short: liquidity costs money and it isn't an infinite resource.
jackgavigan 11y ago
An ETF like RSP won't always track the underlying index value exactly, especially in fast-moving markets. Units of an ETF are just like any other share - an imbalance of sellers over buyers will drive the price down. In an orderly market, that usually isn't a problem - market makers will typically be there ready to absorb market orders and smooth out temporary imbalances, and "authorised participants" can create/redeem units/shares in the ETF if the market price starts to deviate from the NAV (net asset value - the market value of the underlying assets in the fund). In a situation like we had yesterday morning, it's likely that market makers and authorised participants were staying out the market because it was moving too fast for them. In that sort of situation, if panic-sellers or forced sellers (e.g. due to margin calls) are placing market orders, an order book imbalance could easily develop, temporarily driving the price down to an unreasonable level before the market stabilises. Sudden drops trigger trading halts, where trading is suspended for ~5 minutes. Trading in RSP was halted ten times between 9:30 and 10:30am yesterday - it didn't actually trade continuously for more than 34 seconds during that time (you can see this on the chart you linked to - there are only 11 points in the big V on the chart, then it reverts back to one point every minute from 10:30 onwards. The same sort of thing happened during the Flash Crash in 2010.

deleted 11y ago

[deleted]

lucaspottersky 11y ago

loved the paywall

grecy 11y ago

I find it amusing that when the market is rapidly going up, everything is left alone. But when it's rapidly going down, or sporadically doing so, they halt trading and turn everything off for a while. Does anyone else not see this as a clear sign the entire setup is broken and bogus? It's all a big joke.

thesimpsons1022 11y ago
what are you talking about? did you even read the article? it clearly says that anytime a stock goes UP OR DOWN 5 pct they halt trading on it for 5 minutes.

jvm 11y ago

Throughout this thread, commenters are assuming that circuit breakers are helpful and useful. Yet no evidence in favor of that assumption is presented in the WSJ article. The CNN article quotes someone named "Dennis Dick" claiming they are useful without providing evidence. Under economic theory, interference in markets prevents them from correcting prices and is therefore never a good thing. Certainly Milton Friedman [1] thought they were harmful rather than helpful. Is anybody interested in sharing positive evidence that they are helpful? Helpful is presumably defined to mean they help prices stay as accurate as possible. [1] https://books.google.com/books?id=5NQvv_Z-zKcC&pg=PA151&lpg=PA151&dq=milton+friedman+on+circuit+breakers&source=bl&ots=4aqiH3-Hq4&sig=jpXqaDLdflv76iDbD73rZ4eBSUQ&hl=en&sa=X&ved=0CB8Q6AEwAGoVChMI8NrdzNDExwIVRZ6ACh1F9QGX#v=onepage&q=milton%20friedman%20on%20circuit%20breakers&f=false https://books.google.com/books?id=5NQvv_Z-zKcC&pg=PA151&lpg=...

confluence 11y ago
> Certainly Milton Friedman [1] thought they were harmful rather than helpful. Ah yes, Milton Friedman, the man who was right about everything. Also never? Good god man, so what about market manipulation? > Under economic theory, interference in markets prevents them from correcting prices and is therefore never a good thing. Well if the market knew what it was fucking doing then it wouldn't need to correct prices now then would it? But the market does not know what it is doing, and when it shits itself, we have to come in and stop the world from imploding in a negative feedback loop.
stouset 11y ago
Your definition is inherently skewed. After all, what is an "accurate" price other than what the market is trading? Furthermore, why is an accurate price the overall goal? Perhaps other goals are more worthy, and would come at the expense of accuracy.

kaneplusplus 11y ago

http://www.barrons.com/articles/SB50001424052702304718904576486604254916420 http://www.barrons.com/articles/SB50001424052702304718904576...